INSTITUTE OF BUSINESS MANAGEMENT

COLLEGE OF BUSINESS MANAGEMENT

COPERATE LAW

NAME: GHULAM MUHAMMAD MEMON CLASS: BBA ID: 14661 DATE: 19.10.2013 SUBMITTED TO: SIR MUHAMMAD ALI

DEFINITIONS
1. LAW:
law is the body of principles, standards and rules promulgated by Government. It is the solemn expression of the will of the supreme power of the state.

2. CORPORATE: An artificial person of legal entity created by or under the authority

of the laws of a state. It is an association of persons created by statute as a legal entity.

3. COMPANY: It means a legal entity formed by a person or association for lawful

business activities registered under the company ordinance 1984.

4. ARTIFICIAL PERSON: It means a person other than a natural person. Company

is a separate legal entity distinct from its stakeholders. It can borrow money, enter into contracts and hold property on its own name.

5. BONA FIDE: In good faith 6. COMMON SEAL: Every company must have a seal of its own called Common
seal This shall be affixes to share certificates and any other documents, wherever required, only on the authority of a resolution of directors.

7. CONSTRUCTIVE NOTICE: A person may be deemed in law of a certain matter

regardless of whether he has actual knowledge of it. In companies case it applies to some of the details in company registers

8. INTER ALIA: Among other things 9. IPSO FACTO: By that very fact. 10. LIMITED LIABILITY: It means that liability of the members of a company to
pay back the company s debts is limited by the unpaid share capital.

11. PAR VALUE: The amount an issuer agrees to pay at the maturity date. 12. PERPETUAL SUCCESSION: The attribute of a company of continuing to
exist as a lawful entity irrespective of the death, insolvency or other mode of withdrawal of its members.

13. PRIMA FACIE : On first appearance but subject to further evidence or

information.

14. ULTRA VIRUS : Beyond the powers or legal authority of a company or a person.

15. COMPANY LIMITED BY SHARES:

In this company liability of the member is limited to the amount of unpaid value of shares subscribed by him.

16. COMPANY LIMITED BY GUARANTEE: In this company liability is up to

the amount guaranteed by each member.

FORMS OF BUSSINESS 1. SOLE PROPRIETORSHIP: It is the business owned by one single person.
That person owns the entire assets of the business and the profits generated by it. It
has lots of advantages. It is easy to run and is less expensive to organize. Profits flow directly to owner and owner is personally liable to companys debts. This business is easy to dissolve. The disadvantages are that in sole proprietorship single member has un limited liability and is legally responsible for all debts. In this business personal assets are at risk.

2. PARTNERSHIP: In partnership there are two or more people share the

ownership of the business. Partnerships are easy to establish but time must be invested in developing the partnership agreement. Partners will be responsible for the actions of other partners. Profit will be shared with each other. Partner ship will end on the death of one partner. There are also some exceptions for the partnership business if its count of members is more than 20. In the case of joint family business. The partnership between two or more joint families. Lawyers accountant or any other professional practicing firms.

3. CORPORATION: It is the form of business which is separate entity it self. It

can borrow money on its name. It can enter into contracts and can hold property on its name. Shareholders have limited liability to pay the companies debts. The process required to establish a incorporation requires more time and money.

PROMOTERS
Promoter can be a individual, a firm or a company that carries out the amount of preliminary work required before the company can be brought into existence.

FUCTIONS OF PROMOTER:
Promoter is the person who conceives the idea of forming a company and he explores the possibilities through which it can be established. He finds people who sign MOA and AOA and can act as first directors. He settles the name of the company , the capital that will be spent in the company and he will arrange the undertaking. He will select banks, auditors, brokers and legal advisors. He will have to draft the MOA and AOA and the prospectus. He will attend the registration of the company. He will arrange for compliance contracts with

vendors and underwriters. He will do the filling, issue and advertising of prospectus. He will pay the preliminary expenses. He will secure the allotment of shares and debentures. He will take steps to obtain certificate of commencement of business. He will arrange office, factory, machinery and staff.

DUTIES AND LASBILITIES OF PROMOTER:

Promoter must not make any unconscionable use of his position. He must account for any secret profit made by the promotion. If he is selling his own property to the company he must make a full disclosure of the profits he is making otherwise company can rescind the contract and recover the purchase money paid. Recover from the promoter the profit he has made. Company can sue the promoter for damage. Promoter is personally liable for the preliminary expenses unless the company agrees to pay them.

PROCETURE OF INCORPORATION:
Promoter is the individual, firm or company that carries out the procedure to form a in corporation in following steps 1. First decision has to that whether incorporation will be a private limited/ public limited/ listed or unlisted. 2. Second decision will be that where will be the registration office of the company. 3. Arrangement of required number of initial members as per the form of the company 4. Applying to SECP for the name of the company. Applying with three options of names. Word limited must be included in the name except for charitable companies or non profit organizations. 5. SECP allows the name 6. Bank account will be opened 7. Stationary will be printed 8. AOA AND MOA will be printed 9. Application will be submitted for registration in the office of registrar. 10. If registrar gets satisfied with the application, he issues certificate of origin 11. IT is the birth certificate of incorporation and is the primea facie evidence of existence of a company. 12. private company can start business after the certificate whereas public limited company can not start without business till they issue a prospectus in which they invite public to invest capital in it. They have to advertise in at least two newspapers one English and other in Urdu in the province of registered office. 13. If incorporation is public listed company than approval from stock exchange will be required. If it is unlisted public company it does not require advertising prospectus.